Conn. economy likely to rule legislative session

HARTFORD, Conn. (AP) — Connecticut’s new legislative session will likely be a warm-up act for this year’s governor’s race, with the state’s slow economic recovery and job growth still top issues for lawmakers and the candidates hoping to fill the state’s top job.

In the weeks leading up to the General Assembly’s opening day Wednesday, Democratic and Republican legislators, as well as Democratic Gov. Dannel P. Malloy, have unveiled new proposals aimed at improving the state’s economy and jobs picture — a key concern for voters.

“We will continue to be concentrating on job creation, job growth, job attraction, job preparation,” said Malloy, who has yet to announce his re-election plans for 2014. He made the comments last week after announcing new initiatives to help the unemployed, including a statewide job readiness program that includes training, financial coaching, behavioral health services and subsidized work experience.

State lawmakers and Malloy have already devoted a lot of attention and money to job-related programs in recent sessions, most notably the October 2011 special session when the state legislature passed a bipartisan bill that authorized $626 million in bonds. The money was earmarked to fund various business loan, training and tax credit programs, including special assistance to large-scale employers. Mostly Democrats, the legislature’s majority party, then approved borrowing nearly $291 million more to help build a $1.1 billion research lab at the University of Health Center in Farmington, in conjunction with The Jackson Laboratory of Maine.

Malloy contends the state is economically moving in the right direction under his leadership, but Republicans claim Malloy’s plan to jump-start the economy has fallen short, Connecticut continues to be inhospitable to businesses and Democrats aren’t addressing the problem.

“They think that when you focus on jobs, it’s about creating a specific program that has the word jobs in it and that’s showing you’re doing something about jobs,” House Minority Leader Lawrence Cafero Jr., R-Norwalk, said of the Democrats. “It doesn’t talk about the overall economic climate in the state of Connecticut and the kind of policies, regulations, permitting processes, taxation policies, etc., that are actually deterring jobs from being created in Connecticut.”

Labor figures released last week showed Connecticut’s unemployment rate dropped from 7.6 percent in November to 7.4 percent in December despite a decline in the number of jobs. It marked the fourth consecutive monthly decline in the state’s unemployment rate, falling from 8.1 percent in August.

Nationally, the unemployment rate was 6.7 percent in December.

Malloy acknowledged he wishes the jobs numbers were better, but he contends that since he’s been in office, the state is “creating, on a sustained basis, jobs at a faster number, year to year.”

Malloy also pointed to the projected $513 million budget surplus in the state’s General Fund for the fiscal year ending June 30, calling it “an extraordinary achievement” considering the state faced a $3.6 billion deficit when he took office. He announced last week that he intends to use the surplus to bolster the state’s rainy-day fund by $250 million, pay off long-term debts by making an additional $100 million payment toward the state’s pension fund, and provide gas and sales tax refunds.

House Republicans recently proposed using $247 million of the money, which they contend is not an actual surplus given the state’s overall debts, for tax relief. Republicans want to use some of the surplus to end an assessment being charged to businesses. Employers have had to help repay a federal loan to the state’s unemployment compensation fund.

They also want to restore the state’s previous sales tax exemptions on clothing, footwear and nonprescription drugs starting April 1.

On Wednesday, Malloy will unveil his changes to the second year of the two-year, $44 billion budget. After the Democrats took Medicaid spending off-budget, they said the two-year budget figure was actually $37.6 billion.

Malloy and the majority Democrats have called for spending more money on the state’s STEP-Up program, which provides wage and training subsidies to employers that hire an unemployed worker. Since its creation in October 2011, Democrats said, more than 2,000 unemployed people have been hired under the program. Only $2.5 million of the original $20 million pot of money remains.

“It is imperative that the progress we have generated over the past two years not be allowed to falter,” said Senate Majority Leader Martin Looney, D-New Haven. “These programs, these investments, will make a critical difference in the lives of Connecticut residents and businesses.”

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